Tuesday, October 3, 2023

Competition Authority approves Afena Capital acquisition

The proposition by Afena Capital Botswana to acquire an additional 51 percent shareholding from the Group founding company Afena Capital got the nod from the Competition Authority. The proposition is expected to thrust the local asset management firm’s growth ambition. 

“The Authority determined to unconditionally authorise the proposed transaction on the grounds that the proposed transaction is not likely to result in the prevention or substantial lessening competition, or endanger the continuity of the services offered in the market. The market structure in the asset management in Botswana will not be altered and as such does not raise any competition concerns,” reads the merger notice from the CA made public last week. 

Afena Capital Botswana Managing Director, Bakang Seretse explained to the SUNDAY STANDARD that the move to acquire majority shareholding was a strategic step in which both management and staff can duly reflect the demographics of the environment they live and operate in. He also mentioned that it demonstrates the entrepreneurial spirit which would have been in vain if ownership was not obtained. In terms of mapping the way forward, Seretse emphasised that the firm will apply the same investment philosophy which it etched since inception in 2012, citing that it was developed internally. 

Responding to the question on the opportunities control by management will bring, Seretse highlighted that outside of changing the narrative of the local economy, Afena Capital Botswana is poised to tap into the sophisticated needs of investors who now can differentiate the various products of wealth creation. He also observed that regulation is becoming oriented to each specific industry which comes as a benefit to asset managers. The pool of funds under the management of investment firms, he added, opens the potential for the industry to contribute towards infrastructural and entrepreneurial development. He highlighted an immediate growth avenue in collective investments targeted at individuals such as unit trusts. 

“In the short term however it will be remiss of us not to caution that there are tight business conditions this year for asset managers.  For obvious reasons, the world is risk averse given the turmoil globally with such events as the Brexit.  There is also pressure on fee margins and on costs, while client demand higher returns from their investments. But in the long term money will flow into markets and investments won’t stop because with each year the world is becoming better balanced. We expect moderate global growth for the remainder of the year, though global currencies are an issue.  Locally, performance of the market won’t shoot the lights out as this year will be tough, with a gradual improvement, particularly in the equity markets.   Evidence is there of a negative re-rating as valuations for several stocks remain expensive,” expressed Bakang. 

Needless to say, he mentioned that the emerging rebound of the diamond market acts in favour of the country. Another plus he stated is the low bank rate which he anticipates will remain unchanged, with a slight probability of a cut if domestic demand pressures weaken significantly. 


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